Impact of Employee Satisfaction on Success of Organization

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<ul><li><p>INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY SCIENCES AND ENGINEERING, VOL. 2, NO. 5, AUGUST 2011 </p><p>[ISSN: 2045-7057] 41 </p><p>Impact of Employee Satisfaction on Success of </p><p>Organization: Relation between Customer Experience </p><p>and Employee Satisfaction </p><p>Afshan Naseem1, Sadia Ejaz Sheikh</p><p>2 and Prof. Khusro P. Malik GPHR</p><p>3 </p><p>1,3Department of Engineering Management, Centre for Advanced Studies in Engineering, Islamabad, Pakistan </p><p>2COMSATS Institute of Information Technology, Attock, Pakistan </p><p> Abstract Employee satisfaction is considered weighty when it </p><p>comes to define organizational success. Employees satisfaction </p><p>is central concern particularly in the service industry. Need to </p><p>enhance employee satisfaction is critical because it is a key to </p><p>business success of any organization. In the present milieu, </p><p>employee satisfaction has come under limelight due to stiff </p><p>competition where organizations are trying to carve competitive </p><p>advantage through the human factor. The purpose of this study </p><p>is to observe the relationship between employee satisfaction and </p><p>customer satisfaction and to examine the impact of both on </p><p>organizational success. This study scrutinizes the effects of </p><p>different factors of organization which affects the employee </p><p>satisfaction. This is a cohort study in which qualitative research </p><p>methodology was used. The data was collected through self-</p><p>administrated questionnaire which contains multiple choice </p><p>questions and open-ended questions. Results of the principal </p><p>component analysis (PCA) based on correlation matrix revealed </p><p>a great deal of employees (hotel workers) satisfaction among </p><p>surveyed cohorts where customers also had expressed </p><p>satisfaction with existing services. Mainly environmental </p><p>cleanliness, quality food and room services has played vital role </p><p>in creating contentment and subsequent satisfaction among </p><p>customers. From employees perspective, conducive working </p><p>atmosphere coupled with incentives like salary and frequent </p><p>trainings focused the employees to work with dedication to uplift </p><p>the organization (hotels) which is reflected clearly by the </p><p>satisfaction level of customers. Our study confirms indirect </p><p>relation between organizational success and employee </p><p>satisfaction which was mediated by customers. In conclusion, it </p><p>seems reasonable to believe that understanding of employee role </p><p>is extremely important as it appears key factor in the success of </p><p>modern organization. </p><p>Keywords Employees Satisfaction, Organizational Success, </p><p>Customers Satisfaction and Job Satisfaction </p><p>I. INTRODUCTION </p><p>Employee satisfaction plays a significant role in defining organizational success. It is necessary to understand as to </p><p> Afshan Naseem has done MSc in Engineering Management from Centre for </p><p>Advanced Studies in Engineering (CASE), Islamabad, Pakistan, 2009. (Email: </p><p> </p><p>Sadia Ejaz Sheikh has done Masters in Management from Center for </p><p>Advanced Studies in Engineering (CASE), Islamabad, Pakistan, 2010. (Email: </p><p> Prof. Khushro P. Malik teaches at Center for Advanced Studies in </p><p>Engineering (CASE). He holds MBA degree from University of Ottawa and </p><p>Masters Degree in Public Administration from Punjab University. He is certified </p><p>Global Profession Human Resources by HRCI USA. He has extensive work </p><p>experience. (Phone: +92-300-8503903; e-mail: </p><p>how employees can be kept satisfied and motivated to achieve </p><p>out-of-the ordinary results. Customer satisfaction seems to be a </p><p>natural corollary of employee satisfaction and in turn </p><p>organizational success is upshot of this duo. </p><p>There is a need to create a work environment that </p><p>encourages employees to give quality response to customer </p><p>needs. This is the key to pull service-profit chain of business. </p><p>Satisfied employees generate customer satisfaction by </p><p>excellence in performance that leads to organizational success </p><p>thus resulting in improved financial success. So there is a direct </p><p>connection between employee satisfaction and customer </p><p>satisfaction. </p><p>Employee satisfaction not only enhances the productivity, </p><p>but also increases the quality of work. It is necessary for a </p><p>company to perceive as to what employees feel, think, desire </p><p>along with discovering how the workforce devotion and </p><p>commitment can be increased. With amplifying employee </p><p>devotion, business outcomes can be improved, productivity can </p><p>be enhanced, commitment can get intensified and attrition rate </p><p>can take a dip. </p><p>There is a cause-and-effect relationship between the </p><p>customer satisfaction and employee satisfaction. It is unfeasible </p><p>to uphold customer loyalty without employee loyalty. Customer </p><p>service eventually depends on the community who provide that </p><p>service. For that matter, employee loyalty and volunteerism are </p><p>required especially for those employees who serve on front </p><p>lines. Loyalty, devotion and volunteerism cannot be enforced on </p><p>people. It can only be done by providing them encouraging and </p><p>satisfying work environment. </p><p>II. LITERATURE REVIEW </p><p>A. Customer Satisfaction </p><p>Business environment has changed due to globalization </p><p>and free trade and the global competition is increasing with </p><p>exploding. Because of these reasons, to stay in a competitive </p><p>environment and deliver acceptable financial returns, </p><p>managers must know how to handle changes which are </p><p>unexpected. </p><p>Financial performance depends on customer satisfaction. </p><p>There is a direct relation of financial performance and </p><p>customer satisfaction and indirect relation with employee </p><p>satisfaction which is intervened by customer satisfaction. But </p><p>there is a direct relation between customer satisfaction and </p><p>employee satisfaction. The relation between employee </p></li><li><p>INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY SCIENCES AND ENGINEERING, VOL. 2, NO. 5, AUGUST 2011 </p><p>[ISSN: 2045-7057] 42 </p><p>satisfaction and financial performance may not be found </p><p>because it is mediated by customer satisfaction [1]. </p><p>In service industry, customer satisfaction is the key to </p><p>success. A positive relationship exists between customer </p><p>satisfaction, employee satisfaction and perceived service </p><p>quality. Customer perceived service quality completely </p><p>intercedes between job satisfaction of employees and </p><p>customer satisfaction. Service-profit chain framework shows </p><p>that employees who are satisfied can be more productive than </p><p>those employees who are less satisfied [2]. </p><p>B. Employee Satisfaction </p><p>It is factual that employee satisfaction is an innermost </p><p>concern in service industry. It is a multi-factorial construct. </p><p>Employee satisfaction contains basic factors, excitement </p><p>factors and performance factors. Basic factors are the </p><p>minimum requirements that cause dissatisfaction. Excitement </p><p>factors increase customer satisfaction and performance </p><p>factors result in satisfaction only when performance is high </p><p>[3]. </p><p>Employee satisfaction is closely related to service quality </p><p>and customer satisfaction which is then related to firm </p><p>profitability. Service quality has a positive persuade on </p><p>customer satisfaction. Besides this, firm profitability has a </p><p>reasonable non-recursive effect on employee satisfaction. </p><p>Employee satisfaction plays a considerable role in enhancing </p><p>the firm profitability and improving operational performance </p><p>of organizations and quality of goods and services. There is </p><p>no doubt in it that employee satisfaction is critical to attain </p><p>quality and profitability in service industry especially. </p><p>Employee satisfaction impacts quality at industry through </p><p>satisfaction-quality-profit cycle. In service industry, to </p><p>achieve quality and profitability at organization, employee </p><p>satisfaction is fundamental and without it, service industry </p><p>cannot think of being successful [4]. </p><p>Employee loyalty is the important factor to improve </p><p>service quality which is interconnected to customer </p><p>satisfaction and customer loyalty and it gives progress to </p><p>make firm profitability in industries. [8]. </p><p>An imperative relationship exists between employee and </p><p>organization. This employee organization relationship plays </p><p>an important role in success of any organization. There is a </p><p>need of developments in it. Managers are believed to develop </p><p>a role relationship in which actions and decisions should </p><p>promote the interest of organization. Employee involvement </p><p>and contributions in organization is outcome of the interest. </p><p>The quality of employee organization relationship requires </p><p>fulfillment of needs, quality of interaction, adaptability and </p><p>identification [5]. </p><p>Employee empowerment is also an effective way of </p><p>satisfying them. When employees are given employee </p><p>empowerment, then it leads to job satisfaction. Employee </p><p>empowerment also causes customer satisfaction. Similarly </p><p>job satisfaction also leads to customer satisfaction which </p><p>leads to organizational success [6]. </p><p>Employee satisfaction is in fact job satisfaction. Job </p><p>satisfaction is an important job organization factor. Both of </p><p>them are significantly related. Therefore, it is necessary to </p><p>maintain job satisfaction so that employees can be motivated. </p><p>In studying job satisfaction, job rotation, work method, </p><p>problem solving and goal setting are important factors to </p><p>consider and job satisfaction is also influenced by employees </p><p>age, marital status and work experience [7]. </p><p>The distinction of individual employment characteristics </p><p>may influence how employees feel about their work </p><p>environment [9] and the relationship between employee </p><p>satisfaction and financial performance may not be easily </p><p>perceptible due to the fact that it is reconcile by customer </p><p>satisfaction [10]. </p><p>III. METHODOLOGY </p><p>A. Measurement </p><p>In this research paper, we investigate factors of employee </p><p>satisfaction that affect organizational performance. For </p><p>exploring those factors, firstly customers experience was </p><p>accumulated. Satisfied employees would culminate customer </p><p>satisfaction and this will result in organizational success. </p><p>Based on literature review, two self-administrated </p><p>questionnaires were developed. One questionnaire was </p><p>designed to get response from customers for their experience </p><p>at hotels and other questionnaire was designed to get </p><p>response from employees for their job satisfaction. </p><p>In questionnaire designed to collect customer satisfaction </p><p>data, following things were observed: </p><p> The customers/respondents personal profiles related to gender, education, income and willingness to stay at </p><p>hotels. </p><p> The customers experience related to greeting, atmosphere, environmental cleanliness, food and service </p><p>quality. </p><p>In questionnaire designed to collect employee satisfaction </p><p>data, the following things were observed: </p><p> Employee salary and promotion. </p><p> Employee satisfaction related to the guidance and training to employees and their physical working </p><p>conditions. </p><p> Employee response related to work load at employees and their contribution. </p><p>All the responses were measured using Likert-type scale, </p><p>where 1=strongly disagree and 5=strongly agree. </p><p>B. Data Collection </p><p>In this research, data was collected from 12 well known </p><p>(five or seven stars) hotels in 4 big cities of Pakistan. The </p><p>questionnaires were distributed among customers and </p><p>employees and requested to fill them up with their personal </p><p>preferences. </p><p>A total of 150 questionnaires were collected from </p><p>customers and 25 questionnaires were collected from </p><p>employees. Among them, 132 customer questionnaires and </p><p>20 employee questionnaires were selected for analysis </p><p>because remaining questionnaires were having incomplete </p><p>answers. </p><p>C. Data Analysis </p></li><li><p>INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY SCIENCES AND ENGINEERING, VOL. 2, NO. 5, AUGUST 2011 </p><p>[ISSN: 2045-7057] 43 </p><p>The collected data was recorded in SPSS tool for </p><p>analysis of data. Contingency tables were prepared to </p><p>analysis variations between male and female customers. Chi-</p><p>square test of independence was used to check the visiting </p><p>customers with respect to gender vary in education or not. </p><p>Also through 2-test, the preference among male and female </p><p>customers was analyzed for the duration of stay in hotel. </p><p>Principal component analysis was performed on both types of </p><p>data set (customer and employees) to identify components </p><p>(variables) with maximum loading scores that account </p><p>highest variance in the data. This would enable us to select </p><p>attributes in customer experience and employee satisfaction. </p><p>IV. RESULTS </p><p>Overall description of the survey is presented as case </p><p>processing summary with respect of male and female </p><p>respondents. Two variables are described here, one related to </p><p>education status of the customers while other variable was </p><p>about duration of stay in hotel. Response for former variable </p><p>was 100% while a number of customers declined to respond </p><p>about latter variable. Therefore, cases with missing values </p><p>were omitted from the raw data during analysis. </p><p>A. Customer Satisfaction </p><p>i). The relationship between gender of customers who </p><p>visited the hotels and their education was evaluated by chi-</p><p>square test to homogeneity. The results indicate that there is </p><p>significant relation between education level male and female </p><p>customers. </p><p>ii). The preference of duration of stay between males and </p><p>female customers was appeared non significant and it seems </p><p>that the hotels surveyed in this study are equally preferred by </p><p>male and female in terms of deciding how many days they </p><p>want to stay. </p><p>The scores of somewhat agree and strongly disagree are </p><p>separated in first dimension as there have large negative </p><p>scores which is also shown in biplot diagram. This indicates </p><p>that most of the customers are decisive in terms of </p><p>environmental cleanliness which they have observed in the </p><p>hotels. This trend is confirmed as the principal component </p><p>analysis has separated the responses of customers in varying </p><p>category points visible in bioplot diagram (Fig. 1). </p><p>In the above table, each eigenvalues corresponds to a </p><p>factor and each factor to one dimension. The highest </p><p>eigenvalues were observed for the first three factors </p><p>indicating high percentage of variance ensuring that </p><p>maximum variation are accounted in first three dimensions. </p><p>The results presented here indicate that overall satisfaction of </p><p>customers was fairly high particularly for educated customers </p><p>who preferred to stay for longer duration in hotels. The other </p><p>factors which contributed in bringing satisfaction level </p><p>among customers are environmental cleanliness and hea...</p></li></ul>